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Strong Global Sentiments Drive Cadence’s Product Growth

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Growth catalysts

Cadence Design Systems (CDNS), a leading producer of electronic design technologies, continues to gain due to strong demand for smart devices and technological equipment. Moreover, the improving global economy is further driving IT (information technology) spending throughout the world.

Such a bullish IT environment is driving growth in multiple product categories. The revenues in Cadence’s Digital IC Design and Signoff division and its System Interconnect and Analysis division reported rises in both 4Q17 and 2017.

In the above graph, we can see the revenue trends for the Digital IC Design and System Interconnect divisions over the last five quarters. During the period, these divisions grew at CAGRs (compound annual growth rate) of 0.8% and 4.4%, respectively.

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Segment analysis

In 4Q17, the Digital IC Design and Signoff segment’s revenue rose 3.4% YoY (year-over-year) to $145.5 million. Likewise, in 2017, it rose 9.7% YoY to $573 million.

The revenue from the System Interconnect and Analysis division rose 18.9% YoY to $50.2 million in the reported quarter. In 2017, it rose 12.7% to $194.3 million.

This double-digit growth was mainly driven by increased demand for PCB (printed-circuit board) implementation, IC (integrated circuit) packaging, and Sigrity power integrity analysis. Moreover, the newly launched Virtuoso Design System Platform and Allegro DesignTrue DFM (design-for-manufacturing) products continue to be popular, which may, in turn, drive different product divisions.

The launch of these new products could certainly benefit leading chipset manufacturers such as Samsung, Qualcomm (QCOM), and NVIDIA (NVDA), which could boost Cadence’s different product categories.

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